MOROCCO – Morocco’s monarch, King Mohammed VI has ordered the Hassan II Fund to allocate MAD 2 billion (€188.42), to support the financing of entrepreneurship in rural communities.
Morocco’s ministry of Economy said that the program will mainly target small and medium-sized enterprises and young project holders who will get to enjoy a significant reduction in interest rates charged on their loans.
“Fixing the level of these rates would help promote entrepreneurship, create employment and gradually mark a shift in the mindset related to bank loans,” the statement from the ministry read in part.
In recent years, King Mohammed VI has drawn special attention to promoting the emergence of a rural middle class.
The King further instructed that interest rate be reduced to 1.75%, despite the higher “credit risk” occasioned by the narrow market, weather, and large variations in the prices of agricultural products.
Morocco’s banking sector has obliged to the Kings request for lower interest rates and has thus decided to cap the interest rate at 2% for small and very small enterprises.
The interest rate is said to be the lowest ever and aims to promote entrepreneurship.
The creation of the MAD 2 billion fund comes after the King created a fund under the 2020 Appropriation bill that includes a budget of MAD 6 billion (about US$622) to finance enterprises.
The integrated finance programs covers three main initiatives, including the financing of entrepreneurship, the coordination of support actions for entrepreneurship at the regional level, and the financial inclusion of rural populations.
Morocco’s Minister for Economy said that the fund, will mainly benefit young project holders and small and medium-sized enterprises to enable them to have access to financing.
In addition to financing enterprises, the program is set to contribute approximately 27,000 new jobs and support 13,500 additional companies annually.
The government will also set up commissions at the regional level to coordinate and implement measures relating to entrepreneurial support.